Virotec to raise £9m

Environmental and extractive waste-treatment specialist Virotec International is raising £9.3 million at 30p and says it expects to report a maiden profit for the year to last month.

Queensland-based Virotec, headed by executive chairman Brian Sheeran, lost the equivalent of £6 million in 2003-04 (on revenues of £770,000 and after directors' fees of £3 million). More recently it has begun to turn the corner. In December, the AIM-quoted company says it expects to report pre-tax profits of between £1.35 million and £1.75 million for the year to June.

Last December, Virotec received £650,000 in cash and debt repayment from selling its oil refining technology business HydroDec to another company, Vert-eco. The deal also brought the company a 38 per cent stake in the purchaser's equity and it keeps a five per cent royalty on HydroDec's gross revenues.

Last month, Virotech won a contract to treat waste rock at Skytop Mountain in Pennsylvania, whose initial phase could be worth up to £700,000, says Sheeran. The company has now also clinched an exclusive agreement with Saudi Arabia's family-owned Al-Othman group, whereby Al-Othman will sell Virotec's environmental services throughout the desert kingdom (which has only lately become aware of alarming contamination levels from its oil industry).

Broker Numis is handling the placing for Virotec, whose shares were up 2p this morning to 33.75p. They could make further gains.

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